ENROLLED AGENT EXAM LATEST EXAM QUESTIONS AND ANSWERS|
100% CORRECT| GRADED A+|100% PASS
A taxpayer discovers an error on a previous return that would result in an additional refund. The
return for the year in question was filed on March 2, 2020 with the due date being April 15, 2020.
What is the latest acceptable post-marked date for the refund to be issued under the statute of
limitations?
A) March 2, 2022
(B) March 2, 2023
(C) April 15, 2022
(D) April 15, 2023
(D) April 15, 2023
The statute of limitations on a refund being issued based on a change to a previous return is the later of
three years from the due date of the original return or two years from the date the tax was paid. In this
case, it would be three years after the original due date of April 15, 2020 which is April 15, 2023.
What is not a minimum requirement of provided biographical information for the filing of a tax
return?
(A) Providing a social security card
(B) Providing two forms of identification
(C) Date of birth
(D) Citizenship status
(A) Providing a social security card
There is a minimum amount of information that must be provided to file a return. This includes:
• Legal name
• Date of birth
• Marital status
• Residency
• Citizenship
• Identification of any dependents
• Providing two forms of identification
• Providing SSN, ITIN, or ATIN
,Which of the following statements are false in regards to the issuance of an Individual Taxpayer
Identification Number (ITIN)?
(A) An ITIN does not authorize work in the U.S.
(B) AN ITIN does not provide eligibility for Social Security benefits
(C) An ITIN does not indicate ineligibility for a Social Security Number
(D) An ITIN does not qualify a dependent for Earned Income tax credit purposes
(C) An ITIN does not indicate ineligibility for a Social Security Number
An Individual Taxpayer Identification Number (ITIN) is used to identify and process individuals who are
not able to obtain or have a Social Security Number but are still responsible for the filing of a federal tax
return. An ITIN does not provide the following benefits:
• Authorize work in the U.S.
• Provide eligibility for Social Security benefits
• Qualify a dependent for Earned Income Tax Credit Purposes
Which of the following statements are true regarding the application of the gift tax?
(A) The recipient is always responsible for the gift tax
(B) The recipient does not have to report the gift amount unless it is from a foreign donor
(C) The recipient does not have to report the gift amount regardless of the donor
(D) The recipient is never responsible for the gift tax
(B) The recipient does not have to report the gift amount unless it is from a foreign donor
The gift tax is most often the responsibility of the donor and the recipient does not need to report the
income. An agreement may be made in which there is a predetermined shared responsibility. The
recipient also is required to report the gift if it is received from a foreign donor.
All of the following are exempt from the Gift Tax except:
(A) A gift of $40,000 to a spouse
(B) A gift of $19,000 to a dependent
(C) A direct medical payment of $20,000
(D) A gift of $25,000 to a qualified charity
(B) A gift of $19,000 to a dependent
The types of gifts that are excluded from the gift tax are:
• Gifts to qualified charities
• Any gifts to a spouse that is a U.S. citizen
• Gifts directly to the institution for medical or tuition expenses
• Gifts to a political organization
,• Gifts that do not exceed $15,000 to an individual
Which of the following forms is filed not with the IRS, but with the Financial Crimes Enforcement
Network (FinCEN)?
(A) Form 8938
(B) Form 8865
(C) Form 3520
(D) FBAR
(D) FBAR
The filing of Form 114, Report of Foreign and Financial Accounts (FBAR) is not done with the IRS and is
instead filed with the Financial Crimes Enforcement Network (FinCEN).
Which of the following is not a potential penalty for the willful failure to timely file an FBAR?
(A) 50% of the balance in the foreign account
(B) Criminal fines
(C) Prison time
(D) None of the above
(D) None of the above
Failure to file an FBAR in a timely fashion is differentiated by a willful or non-willful failure to comply. The
willful failure may be associated with fines of up to 50% of the balance in the foreign account. Additional
criminal penalties are applicable including criminal fines and prison time.
The filing of Form 8938, Statement of Specified Foreign Financial Assets is required for married filing
jointly taxpayers if the financial assets equal which of the following in a U.S. home?
(A) $50,000 on the last day of the year or $75,000 at any one time
(B) $100,000 on the last day of the year or $150,000 at any one time
(C) $150,000 on the last day of the year or $200,000 at any one time
(D) $200,000 on the last day of the year or $250,000 at any one time
(B) $100,000 on the last day of the year or $150,000 at any one time
The filing requirements for Form 8938, Statement of Specified Foreign Financial Assets is required if the
assets reach a certain threshold depending on the filing status. For single or MFS, if the account exceeds
$50,000 on the last day of the year or $75,000 at any time during the year, the form is required. For
Married filing jointly, the threshold is $100,000 on the last day of the year or $150,000 at any time
during the year.
An individual places $20,000 in a European bank in the month of August. At the time of the
transaction, the money is converted to euros at an exchange rate of 0.92 U.S. Dollars to Euros. The
individual is required to file an FBAR and at the end of the year, at which time the exchange rate is
0.90. What is the appropriate reported value of the account?
, (A) €18,400 Euro
(B) €18,723.22 Euro
(C) $20,000 dollars
(D) $20,444.44 dollars
(D) $20,444.44 dollars
The reporting for the value in the foreign account for the FBAR is taken as the exchanged rate in U.S.
Dollars at the end of the calendar year. In this example, the individual converts $20,000 to euros at an
exchange rate of 0.92 which is €18,400 Euro. At the end of the calendar year, the exchange rate changes
and the Euro account needs to be converted back to U.S. Dollars at a rate of 0.9 = $20,444.44.
An individual rents out a room in his house which is sized 12' x 14'. The total square footage of the
home is 1280 square feet. What portion of the yearly utility bill of $1,200 can be deducted as a rental
expense?
(A) $157.50
(B) $212.67
(C) $600
(D) $1,200
(A) $157.50
If a portion of a home is rented out, the rental expenses can be a deduction partially. The percentage of
the total cost can either be calculated by the number of rooms or a square footage calculation. The
percentage for this scenario can be determined by the square footage of the individual room which is 12
x 14 = 168 square feet divided by the total. 168/1280 = 13.125%. The percentage can then be applied to
total expenses such as utilities: 13.125% of 1200 = $157.50.
All of the following statements are true regarding the qualification of real estate as professionals
except:
(A) The taxpayer must provide more than ½ of the personal services in real property
(B) The taxpayer must provide more than 750 hours of the personal services in the tax year
(C) The taxpayer must provide personal services in more than one real property
(D) None of the above
(C) The taxpayer must provide personal services in more than one real property
For a landlord to be considered a professional, they must meet the following requirements:
• The taxpayer must provide more than 1⁄2 of the personal services in real property
• The taxpayer must provide more than 750 hours of the personal services in the tax year
If the taxpayer meets these requirements, the rental activities are not considered passive and are fully
deductible.
An individual tax return is determined to have an understated gross income of 40% of the actual
amount. What is the length of time for the statute of limitations for an IRS assessment and collection?
100% CORRECT| GRADED A+|100% PASS
A taxpayer discovers an error on a previous return that would result in an additional refund. The
return for the year in question was filed on March 2, 2020 with the due date being April 15, 2020.
What is the latest acceptable post-marked date for the refund to be issued under the statute of
limitations?
A) March 2, 2022
(B) March 2, 2023
(C) April 15, 2022
(D) April 15, 2023
(D) April 15, 2023
The statute of limitations on a refund being issued based on a change to a previous return is the later of
three years from the due date of the original return or two years from the date the tax was paid. In this
case, it would be three years after the original due date of April 15, 2020 which is April 15, 2023.
What is not a minimum requirement of provided biographical information for the filing of a tax
return?
(A) Providing a social security card
(B) Providing two forms of identification
(C) Date of birth
(D) Citizenship status
(A) Providing a social security card
There is a minimum amount of information that must be provided to file a return. This includes:
• Legal name
• Date of birth
• Marital status
• Residency
• Citizenship
• Identification of any dependents
• Providing two forms of identification
• Providing SSN, ITIN, or ATIN
,Which of the following statements are false in regards to the issuance of an Individual Taxpayer
Identification Number (ITIN)?
(A) An ITIN does not authorize work in the U.S.
(B) AN ITIN does not provide eligibility for Social Security benefits
(C) An ITIN does not indicate ineligibility for a Social Security Number
(D) An ITIN does not qualify a dependent for Earned Income tax credit purposes
(C) An ITIN does not indicate ineligibility for a Social Security Number
An Individual Taxpayer Identification Number (ITIN) is used to identify and process individuals who are
not able to obtain or have a Social Security Number but are still responsible for the filing of a federal tax
return. An ITIN does not provide the following benefits:
• Authorize work in the U.S.
• Provide eligibility for Social Security benefits
• Qualify a dependent for Earned Income Tax Credit Purposes
Which of the following statements are true regarding the application of the gift tax?
(A) The recipient is always responsible for the gift tax
(B) The recipient does not have to report the gift amount unless it is from a foreign donor
(C) The recipient does not have to report the gift amount regardless of the donor
(D) The recipient is never responsible for the gift tax
(B) The recipient does not have to report the gift amount unless it is from a foreign donor
The gift tax is most often the responsibility of the donor and the recipient does not need to report the
income. An agreement may be made in which there is a predetermined shared responsibility. The
recipient also is required to report the gift if it is received from a foreign donor.
All of the following are exempt from the Gift Tax except:
(A) A gift of $40,000 to a spouse
(B) A gift of $19,000 to a dependent
(C) A direct medical payment of $20,000
(D) A gift of $25,000 to a qualified charity
(B) A gift of $19,000 to a dependent
The types of gifts that are excluded from the gift tax are:
• Gifts to qualified charities
• Any gifts to a spouse that is a U.S. citizen
• Gifts directly to the institution for medical or tuition expenses
• Gifts to a political organization
,• Gifts that do not exceed $15,000 to an individual
Which of the following forms is filed not with the IRS, but with the Financial Crimes Enforcement
Network (FinCEN)?
(A) Form 8938
(B) Form 8865
(C) Form 3520
(D) FBAR
(D) FBAR
The filing of Form 114, Report of Foreign and Financial Accounts (FBAR) is not done with the IRS and is
instead filed with the Financial Crimes Enforcement Network (FinCEN).
Which of the following is not a potential penalty for the willful failure to timely file an FBAR?
(A) 50% of the balance in the foreign account
(B) Criminal fines
(C) Prison time
(D) None of the above
(D) None of the above
Failure to file an FBAR in a timely fashion is differentiated by a willful or non-willful failure to comply. The
willful failure may be associated with fines of up to 50% of the balance in the foreign account. Additional
criminal penalties are applicable including criminal fines and prison time.
The filing of Form 8938, Statement of Specified Foreign Financial Assets is required for married filing
jointly taxpayers if the financial assets equal which of the following in a U.S. home?
(A) $50,000 on the last day of the year or $75,000 at any one time
(B) $100,000 on the last day of the year or $150,000 at any one time
(C) $150,000 on the last day of the year or $200,000 at any one time
(D) $200,000 on the last day of the year or $250,000 at any one time
(B) $100,000 on the last day of the year or $150,000 at any one time
The filing requirements for Form 8938, Statement of Specified Foreign Financial Assets is required if the
assets reach a certain threshold depending on the filing status. For single or MFS, if the account exceeds
$50,000 on the last day of the year or $75,000 at any time during the year, the form is required. For
Married filing jointly, the threshold is $100,000 on the last day of the year or $150,000 at any time
during the year.
An individual places $20,000 in a European bank in the month of August. At the time of the
transaction, the money is converted to euros at an exchange rate of 0.92 U.S. Dollars to Euros. The
individual is required to file an FBAR and at the end of the year, at which time the exchange rate is
0.90. What is the appropriate reported value of the account?
, (A) €18,400 Euro
(B) €18,723.22 Euro
(C) $20,000 dollars
(D) $20,444.44 dollars
(D) $20,444.44 dollars
The reporting for the value in the foreign account for the FBAR is taken as the exchanged rate in U.S.
Dollars at the end of the calendar year. In this example, the individual converts $20,000 to euros at an
exchange rate of 0.92 which is €18,400 Euro. At the end of the calendar year, the exchange rate changes
and the Euro account needs to be converted back to U.S. Dollars at a rate of 0.9 = $20,444.44.
An individual rents out a room in his house which is sized 12' x 14'. The total square footage of the
home is 1280 square feet. What portion of the yearly utility bill of $1,200 can be deducted as a rental
expense?
(A) $157.50
(B) $212.67
(C) $600
(D) $1,200
(A) $157.50
If a portion of a home is rented out, the rental expenses can be a deduction partially. The percentage of
the total cost can either be calculated by the number of rooms or a square footage calculation. The
percentage for this scenario can be determined by the square footage of the individual room which is 12
x 14 = 168 square feet divided by the total. 168/1280 = 13.125%. The percentage can then be applied to
total expenses such as utilities: 13.125% of 1200 = $157.50.
All of the following statements are true regarding the qualification of real estate as professionals
except:
(A) The taxpayer must provide more than ½ of the personal services in real property
(B) The taxpayer must provide more than 750 hours of the personal services in the tax year
(C) The taxpayer must provide personal services in more than one real property
(D) None of the above
(C) The taxpayer must provide personal services in more than one real property
For a landlord to be considered a professional, they must meet the following requirements:
• The taxpayer must provide more than 1⁄2 of the personal services in real property
• The taxpayer must provide more than 750 hours of the personal services in the tax year
If the taxpayer meets these requirements, the rental activities are not considered passive and are fully
deductible.
An individual tax return is determined to have an understated gross income of 40% of the actual
amount. What is the length of time for the statute of limitations for an IRS assessment and collection?
